I've just encountered this bug today for the first time. The symptoms
are exactly the same: <serial> and <console> in the domain xml,
apparmor="DENIED" messages in kern.log and a reboot fixed the problem.

I'd like to nominate this bug for Oneiric and Precise, however Launchpad
is OOPSing.

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https://bugs.launchpad.net/bugs/632696

Title:
  libvirt won't start a VM with serial or console

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